Managing Vendors – Articles by Jim Everett

Tips on managing vendors, skills and competencies required

When Does Partnering Start?

Posted on | August 21, 2008 | CLICK HERE TO COMMENT OR ASK QUESTION

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Partnering or collaborating with services vendors has become acceptable and even popular these days. But many companies who see the potential benefits, still treat vendors as commodities. This often happens in the pre-engagement phase when a vendor is being selected. It suggests they may have yet to develop a complete partnering mindset.

Mindsets are reflected more in actions and behaviors than in stated ideals. A common blindspot is to regard a potential service provider as a fixed resource that is on permanent standby. True partnering recognizes that the vendor has a business model, existing work, and other clients. And most vendors will have tuned their operation so there is very little idle resource at any point in time.

When a vendor bids on a project or ongoing program, they make good faith assumptions about when the engagement will start based on what the client tells them. Their proposal, deliverables and pricing is based on what resources they can have available at that time.

A client sometimes tells a vendor in advance they are the first choice, and it just requires management approval to move forward and begin. The vendor will often free up and allocate resources to be ready to take on the task. Or they may bring additional resources on board.

But when the client delays the final decision to engage, and does not communicate anything to the vendor, then this changes the readiness of resources with the vendor. The unexplained delay will likely impact timelines and quality (or price) when the client finally decides.

Another impact is that the vendor may also have their own supplemental vendors and supply chain whose time and availability they have to manage in anticipation of a new engagement.

So if the client is aiming for a partnering relationship with the vendor, then delaying the launch of the engagement with no explantion or contact is not partnering behavior. If the client is serious about partnering, then the project leader needs to keep the chosen vendor in the loop, much as if they are another department in the client organization. This sets a much better partnering tone for when the engagement actually begins.

In most cases, client-side delays are caused by an overly optimistic, inexperienced, or overburdened client project manager. They simply don’t realize how long the lead-up will take. Or, they may have left it late in the outsourcing timeline to start selecting a vendor, and are under pressure to make up for lost time (that will be the subject of my next post).

In some cases uncommunicated delays may be deliberate. In my iTunes podcast, “Managing Vendors”, Episode 4, “Games That Clients Play”, I mention how a client can pretend there is a shorter timeline so they have more time to make changes, or hide part of the budget to gain a lower bid. This manipulation is not partnering behavior. You can listen to that podcast here.

Where the client delays the decision, for whatever reason, without keeping the vendor in the loop, then suddenly announces the need to start, the project may be compromised. It may already have moved into the critical path. The vendor may have to pay overtime or bring in more costly resources to keep the project on track. To offset this, they may need to cut back on quality, or leave out value-added extras they had planned to include.

So the message here to clients is, if you plan to partner with a vendor, set a partnering tone by starting with the right behaviors during the selection phase. Make a point of keeping prospective vendors posted on progress, decisions, and changes in that important lead-up before the engagement officially commences.

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